PPC insights: Our top SEM columns of 2017

Though paid search has long since cemented its place as a pillar of digital marketing, changes in technology and consumer behavior have continued to reshape the PPC landscape and keep search marketers on their toes. In 2017, we saw the last of “standard” text ads in AdWords as expanded text ads, introduced in 2016, became the new norm. We also said goodbye to the literal definition of “exact” as Google expanded exact match targeting to include close variants.

Yet, on the whole, search marketers spent more of 2017 looking forward than dwelling on the past. Two of our most widely-read columns, penned by former Googler Frederick Vallaeys, were forward-thinking pieces that focused on how artificial intelligence (AI) and machine learning are driving innovation and automation in paid search.

This past year also saw a host of new feature releases, and with new capabilities comes the need to try new things — which is why so many of our top columns this year focused on testing. From ad copy testing to landing page testing, search marketers sought out resources to help ensure that their ads are reaching their full potential.

For these topics and more, check out Search Engine Land’s top paid search columns of 2017!

    The best-kept AdWords secret: AMP your landing pages by Frederick Vallaeys, published on 5/10/2017.Seriously, Google, can you just make exact match exact? by Daniel Gilbert, published on 3/21/2017.Attention search marketers: ALL keywords are branded keywords! by Larry Kim, published on 1/23/2017.10 AdWords ad copy testing ideas you can use right now by Jason Puckett, published on 3/14/2017.The AdWords 2017 roadmap is loaded with artificial intelligence by Frederick Vallaeys, published on 6/7/2017.3 free AdWords testing tools to adopt today by Todd Saunders, published on 3/7/2017.Three foolproof steps to excellent AdWords ads by Matt Lawson, published on 3/17/2017.This script creates Google Slides with AdWords data to automate your presentation-making by Frederick Vallaeys, published on 8/2/2017.The great big list of landing page tests to try by Amy Bishop, published on 5/2/2017.How artificial intelligence drives PPC automation by Frederick Vallaeys, published on 1/18/2017.

Unique international trends require a unique marketing approach

It’s that time of the year! That time of year when we all agonizingly optimize for holiday shopping behavior, do our best to navigate complicated family dynamics and read countless end-of-year lists.

SEL reporter Amy Gesenhues recently summarized the annual release of Google’s “Year in Search” for 2017, and there were some interesting takeaways. (Not the least of which was that the “Malika Haqq and Ronnie Magro” query didn’t make the Top 10 Searches Overall list — admittedly, I have no idea who those people are, but their names sure are fun to say!)

Lists of this nature are intended to be simple, fun, and (to be candid) easy press hits. But there’s actually an important and applicable lesson to be distilled here, too. These “Year in Search” lists are representative of the searching populace; the lists communicate the interests of the collective audience. There certainly was no shortage of compelling stories in 2017, but the subjects included in Gesenhues’s piece are what drove the most engagement in this country.

Of course, as digital marketers, we’re obsessed with targeting and often dismiss any characteristics of the “collective audience” as irrelevant to our sophisticated efforts. But in fact, the clear message that this peek-into-the-collective communicates is the value of targeting.

Yandex, Russia’s leading search engine (and my employer), recently released its own version of the “Year in Search” — and there is very little overlap with Google’s. This may not be shocking to you, but if it’s common knowledge that the trends in one market may be vastly different than those in another, then why do so many advertisers apply the same approach across markets?

More and more American companies are expanding their target audiences to incorporate the international consumer. Of course, there are more potential customers outside of the US than within, so the allure is understandable. But each international market is unique, and your marketing strategies need to reflect the differences.

Below is Yandex’s 2017 Year in Search. Don’t forget to compare with Google’s list here!

Events

    St. Petersburg metro terrorist attackBlue Whale Game and social network death groups“Matilda” film scandalIntroduction of fines for vehicles lacking a studded-tire signAnti-Corruption Foundation (FBK) activitiesCoxsackievirus in TurkeySevere storm in MoscowRelics of St. Nicholas in MoscowRohingya persecution in MyanmarOpening of Zaryadye Park in Moscow

Men

    Dima BilanAndrey MalakhovArmen DzhigarkhanyanКirill SerebrennikovFace (Ivan Dryomin)Anatoliy PashininEmmanuel MacronYuri DudVladimir KuzminDmitry Borisov

Women

    Maria MaksakovaYuliya SamoylovaDiana ShuryginaDana BorisovaAnastasia VolochkovaAnastasia ShubskayaRavshana KurkovaNatalia ShkulevaTatiana TarasovaBrigitte Macron

Things and Phenomena

    CryptocurrencyFidget SpinneriPhone XSamsung Galaxy S8iPhone 8Yandex’s AI assistant AliceRap battlesUpdated Nokia 3310BlockchainNew 200 and 2,000 rouble notes

Sports

    Ice hockey World ChampionshipConfederations CupRussian Football ChampionshipMayweather vs. McGregor fightKontinental Hockey League ChampionshipChampions LeagueEmelianenko vs. Mitrione fightWorld Cup 2018Russia-Spain matchRussia-Portugal match

Films

    ItDespicable Me 3Guardians of the Galaxy Vol. 2VikingPirates of the Caribbean: Dead Men Tell No TalesThe Last WarriorThe Fate of the FuriousTransformers: The Last KnightAttractionSpider-Man: Homecoming

Foreign TV Series

    Game of ThronesGrechankaSherlockRiverdaleThe Walking DeadSupernaturalSkamTabooThe FlashTwin Peaks

Memes

    Eshkere (“Esketit”)Zhdun (“The one who waits”)Eto fiasko, bratan (“This is a fiasco, bro”)Cevapcici Na donyshke (“Just a little”) Easy-easy, real talk, think about itTak, blyat (“What the!!!”)HypeVinishko-tyan (term used for a hipster-like youth subculture)Ave Maria! Deus Vult!

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

6 ways ad agencies can thrive in an AI-first world

Artificial intelligence (AI) and machine learning have long been part of PPC — so why are AI and machine learning all of a sudden such hot topics? It is, in part, because exponential advances have now brought technology to the point where it can legitimately compete with the performance and precision of human account managers.

I recently covered the new roles humans should play in PPC as automation takes over. In this post, I’ll offer some ideas for what online marketing agencies should consider doing to remain successful in a world of AI-driven PPC management.

Be a master of process

According to the authors of the book “The Second Machine Age,” chess master Garry Kasparov offered an interesting insight into how humans and computers should work together after he became the first chess champion to be defeated by a computer in 1997. In matches after his loss to Deep Blue, he noticed a few things:

    A human player aided by a machine could beat a computer.When two human players were both assisted by a computer, the weaker human player with a good process could beat the stronger player with an inferior process.

The first point is covered in my previous post, and it is the foundation for why smart PPC managers will learn to collaborate with AI rather than compete against it.

The second point got me thinking about some other scenarios where the winners aren’t necessarily the most skilled. Does the world’s most successful coffee chain have the best baristas? Do the most successful hotels employ staff who innately know how to make guests happy?

No. In almost any scenario where humans are a big part of the experience, success is achieved by having a clear mission that is supported by a really strong process and tools to achieve the mission.

Hence, I believe that in the world of PPC agencies, a primary focus should be on building an amazing process and equipping the team with tools that make that process easy to follow. So as AI takes over some of the tasks in your agency, make sure your staff knows and follows the process for leveraging the technology to deliver results.

Accept that your old value proposition is toast

Consider how you convinced your existing clients to sign up with your agency. If your pitch included that you produce amazing results because you’re really good at bid management (something machines are getting really good at), you may need to tweak your positioning. You don’t want to make your main value proposition something that can be put on autopilot by anyone — and will hence become very difficult to price at a level that makes you successful.

That’s not to say that you should stop thinking about something like bid management altogether. Instead, you should offer skills that are complementary to the AI system rather than skills that compete against it.

Hal Varian, Google’s chief economist, gives the career advice to “become an indispensable complement to something that’s getting cheap and plentiful.” For example, become a data scientist because we’ll need more people to make sense of the data and to figure out how to turn new insights we get from more sophisticated AI into new strategies.

In the context of an ad agency, this makes a lot of sense. You want to be able to say you have great data scientists who can make sense of what the automated systems are doing and make solid recommendations for the next thing to test.

Determine your new value proposition

Do you know California’s largest agricultural export? I guessed wine, but the correct answer is almonds. How did this come to be? It turns out that almonds are easy to harvest mechanically; you basically have a machine that violently shakes the tree so the nuts fall down to be harvested. So farmers figured they could be more productive by using automation, and all of a sudden tomato fields across the state were turned into almond orchards.

But people want more than just almonds on their plates, so despite how automation moved an entire state’s economy in a certain direction, it also created opportunities for farmers who didn’t automate.

We can apply this analogy to paid search agencies. Thanks to advances in AI, it is a given that they will do a good job of managing bids, and it’s also assumed that this service will be cheap because technology has commoditized it.

Agencies, like farmers, can supplement their highly automatable service offerings with something that commands a higher fee. So figure out what will be your niche in things that are harder to automate. And think about why a client would want to hire you if you’re just as good as the next agency at managing bids. Figure out what additional services you are really good at that are harder to automate (for now) and can be used to win new business.

Be the best at testing because testing leads to innovation

Innovative agencies win awards, which makes it easier for them to land new clients and grow their business. But how can an agency be innovative in a world where a lot of the work is done by a handful of automated systems that produce similar results?

I believe economist Martin Weitzman’s recombinant view of innovation offers a possibility. Recombinant Innovation describes innovation as a process through which new ideas emerge as the combination of existing ideas. Thanks to better prediction systems using machine learning, it is now possible for agencies to test new ideas faster and to iterate faster. Hence, an agency that leverages machine learning for testing and has a really strong process will be able to out-innovate its competitors.

Innovation in an agency is to recombine ideas into valuable new ones. The problem with testing new ideas is that it used to take a lot of time. But thanks to technology, you can test more things more quickly, and the winning agencies will be those that are the fastest at finding new winners. And they can achieve this by prioritizing the most likely winners into the fastest process, with the best testing technology.

You need to monitor the tradeoffs between labor and technology

Business is a big optimization problem. As an agency owner, you balance labor (headcount), and capital investment (technology) to achieve outcomes with a target level of speed, quality and cost. As technology takes hold in more aspects of PPC management, knowing how to optimize the equation becomes critical.

What some advertisers fail to see is that there is no perfect technology (just as there is no perfect human employee), but if a technology gets you close enough to the desired result while freeing up your staff’s time to work on other things, that is a win.

We all hire people for our companies, even when we know that ALL humans make mistakes. But we hire the best we can because it gets us closer to our goals, even if not 100 percent of the way. So why should it be any different when we think about capital investments?

A former colleague of mine who is still at Google shared examples where advertisers told him that they would not use broad match because it resulted in some impressions for their ads on irrelevant queries. But when prodded further, they were unable to quantify the impact this had. In many cases, the additional clicks were negligible, while the time they could have saved by letting Google’s AI handle query exploration was significant.

In my view, this is a poor optimization of that account manager’s time. In exchange for a small sacrifice in targeting precision, they could have freed up billable hours worth hundreds of dollars.

Hire one extraordinary (wo)man

American philosopher Elbert Hubbard said that “one machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” And he was on to something. In engineering, a great engineer can do the work of 10 good engineers.

So, as more of an agency’s work gets done by machines and you need fewer humans to do repetitive work, having the smartest possible person to work on the tasks that remain will be more important than ever.

Conclusion

There’s never a boring day when working on PPC, mostly because Google pushes so many changes every year. But this year, AI is going to stir the pot and create some challenges unlike the ones we’ve been used to dealing with. Hopefully, some of the thoughts shared here will get you thinking about strategies for keeping your agency successful in a world of AI-first PPC.

Stay tuned for my next post in this series, where I’ll cover how the technology got us here and what we can automate today.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

Take our Holiday Retail Survey & let us know how your search marketing strategy changed this year

Did you switch up your holiday digital marketing strategies in 2017? Maybe extend your search ad campaigns? Or sell on more marketplaces? If so, we want to know about it.

Please take five minutes to complete the SMX survey exploring what digital marketing strategies were put in place by search marketers this holiday retail season — the 2017 Holiday Retail Survey.

Responses are kept anonymous, and the data gathered from the survey results will be shared during the Holiday Retail Search Strategies webcast on January 18, featuring panelists Brad Geddes, the co-founder of Adalysis, Marketing Land associate editor Ginny Marvin, Elite SEM’s Aaron Levy and CommerceHub’s Elizabeth Marsten.

Completing the survey will help add to the conversation around this season’s best search marketing strategies and whether strategy shifts were advantageous. Also, survey participants are entered for a chance to win a copy of Brad Geddes’ “Advanced Google Adwords” search marketing guide.

Everyone is invited to register for the January 18 webcast and listen in as the panel digs into the survey results and discusses the search marketing strategies that paid off this year, and what marketers may look to change during next year’s holiday season.

Take the 2017 Holiday Retail Survey.

Register for the Holiday Retail Search Strategies webcast on January 18.

[This article first appeared on Marketing Land.]

Supercharge your email marketing with Google AdWords

I have a confession to make.

The odds of my instantly deleting one of the many marketing emails I receive each day are about as good as Tom Brady and the Patriots making the playoffs — meaning it’s pretty likely to happen.

Unfortunately for all you email marketers out there, I’m not alone. According to email marketing service MailChimp, the average email open rate across industries is below 25 percent, with a click rate of 2 to 3 percent. That means that, on average, you’d need to send 100 emails to get two or three people to take any action. All that time and energy spent crafting the perfect email marketing campaign will be wasted if you don’t create a complementary strategy to get more sales from your hard-earned email list.

The good news is that you can use Google AdWords as your complementary strategy by simply leveraging the existing data you have on your email subscribers. Let’s dive into the best ways to make that happen.

Learn the ins and outs of Customer Match in AdWords

Customer Match in AdWords might be the greatest secret weapon for email marketers that Google has to offer. It allows you to target or exclude your existing customers on Google Search, Display and YouTube by simply uploading your customer email list to AdWords. Think of it as another way to nurture your sales leads besides sending them more emails.

The best thing about Customer Match is that it’s not that difficult to get up and running. Here’s what you need to do to get started:

Click on the “Wrench” icon in the top right corner of your AdWords Dashboard.Click on “Audience Manager” under the Shared Library section.Click on “Audience Lists” from the Page Menu on the left.Click on the blue “+” button to create a new audience list.Select “Customer List.”Choose the option to upload a plain text data file or a hashed data file.Choose your new file.Check the box that says “This data was collected and is being shared with Google in compliance with Google’s policies.”Set a membership duration (this should be determined by the types of customers that make up the list).Click “Upload and Create List.”

Please note that these instructions are for the “new” version of the AdWords dashboard. If you’re interested in Customer Match but are still using the “old” version of the AdWords dashboard, see here for more instructions.

Segment your email list

Now that you have a better understanding of Customer Match, let’s take a look at how you might want to slice and dice your email list to more effectively target your sales leads on AdWords.

Take a look at the following email audience segments we use at AdHawk (my company) for a moment:

New and engaged email subscribers who have not become customers.Email subscribers who have not opened an email recently.Email subscribers who are existing customers and would be a good fit for an upgraded product or service.

Each of these email audience segments has an entirely different relationship with our business and needs to be messaged to differently. If you have a similar breakdown of your marketing emails, you can repurpose your email list segmentation for your AdWords campaigns via Customer Match. This will allow you to tailor the messaging of your ads for each segment, and as a result, help to nudge your sales leads farther down your funnel.

Create a different AdWords strategy for each segment of your email list

Once you have your email audience segments in place, it’s time to develop a unique AdWords strategy for each segment.

I’m going to use the three email audience segments noted above as examples. Your approach might be different, and that’s okay. Just make sure you’re not using general ads for every email audience segment you have on your list.

Converting new and engaged email subscribers

When a new lead signs up to learn more about AdHawk, our team goes into “educate” mode. The goal is to get them to see the value of our product and services as quickly as possible so we can move them down the funnel.

Our “Welcome” email flow takes the first steps in educating our leads, and it performs pretty well compared to the industry average. But our secret weapon emerges when we take a list of our “new” sales leads and turn it into a Customer Match campaign in AdWords.

Here’s what a typical flow for this segment looks at AdHawk:

Step 1: Potential customer signs up to learn more about AdHawk.Step 2: After signing up, the potential customer receives the first email in the “Welcome” email flow, with a call to action to book a time with our sales team.Step 3: A Customer Match segment is created for all “new” prospective customers that didn’t take action on the first email in the “Welcome” email flow.

By using a Customer Match segment for all new and engaged AdHawk sales leads, we’re able to bid up on more generic keywords that would be too risky to bid up on for a general search campaign. We’re also able to create Gmail Ads with a similar look and feel to our “Welcome” emails series that prompt a strong customer recall.

Converting unengaged email subscribers

Converting unengaged email subscribers can be a huge pain in the butt. They’ve stopped engaging with your emails, so the worst thing you could do is continue to bash them over the head with more emails.

Here’s the flow we use to re-engage leads that have left us hanging:

Step 1: Potential customer signs up to learn more about AdHawk but does not engage with our emails for 30 days.Step 2: A Customer Match segment is created for all “unengaged” prospective customers.Step 3: A Remarketing campaign is created to target prospective customers that have not converted after 30 days.Step 4: We tailor the Customer Match and Remarketing ads to promote a special offer.

This group is the least likely to convert, so any new business scraped up is a huge win! It’s important to educate these stale leads on what we do and remind them why they signed up in the first place.

Upselling existing customers to a new product or service

Most marketers are so intent on attracting new business that they often forget that there is a wealth of opportunity under their noses. Don’t sleep on marketing to those that have bought something from you in the past! We use our existing customer segment to promote new features or products we feel they will be a good fit for.

Here’s the flow we use to target existing customers:

Step 1: A Customer Match segment is created for our “Existing Customers.”Step 2: We further segment this list by renewal date to ensure that customers see our ads when their contract is up.Step 3: Tailor the ads to promote additional services we offer that our customers are not leveraging.

We’ve structured our flow this way because our product runs on a subscription basis. If you’re selling physical goods that can be repurchased often, break down your segment by the products your customers have shown the most interest in. That way, you can tailor your ads to the specific products you believe would resonate most with them.

Final thoughts

Are you leveraging AdWords as part of your email marketing strategy? If you are, I’d love to learn more about what strategies you have used that have been successful.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

The vicious cycle of ROAS targets is killing your business

Your marketing team is hard at work tweaking ads and landing pages to drive efficiency and hit the targets set for them by the C-suite. And those targets are more than likely ROAS-related.

But, for two reasons, these ROAS targets are actually causing a lot of damage:

    ROAS usually doesn’t take incrementality into account, which incentivizes marketers to turn on retargeting or brand campaigns to meet their targets while hardly generating any tangible results.It sets incentives to sell more low-margin products to mainly existing customers because this type of second-class revenue is cheaper to get.

If, like most companies, you’re focused on growth and new customer acquisition, you need to ditch ROAS-based KPIs, come up with a new metric and include incrementality before it’s too late.

This is what you get if you ignore incrementality

When we talk about “incremental sales” as a digital marketing KPI, we’re talking about how much a specific marketing campaign or channel contributed to increasing sales revenue. So, if a search or shopping ad led to a sale that wouldn’t have happened otherwise, that’s an incremental sale.

Return on ad spend (ROAS) takes into account purchases from users after clicking on an ad. At first glance, that sounds reasonable. It seems like that measure would tell you how good an ad is at driving revenue.

But what ROAS usually doesn’t tell you is whether or to what extent those sales would have happened anyway (without showing ads). In other words, ROAS doesn’t account for incrementality.

Imagine you’re shopping for high-priced luxury products; you put them in the shopping basket, but then decide to wait another few days to think about whether it’s worth spending the money. Then you see your favorite products following you all over the web, and at some point, you’re intrigued to click through. Finally, the day after, you buy. This happens hundreds of thousands of times every day.

Our industry now understands — much better than a couple of years ago, at least — that a significant number of these people would have bought the items anyway, even if they hadn’t seen the ad.

You’re probably thinking, “OK, sure, but how big a deal is incrementality, really?” It turns out it’s quite a big deal. Based on our internal client testing here at crealytics, we’ve found the following:

If you’re a multibrand retailer (e.g., Kohl’s or Staples), brand searches will usually drive no more than 1 percent incremental sales.Display retargeting often hovers around 5 percent incremental sales when tested properly.Search retargeting rarely gets higher than 20 percent incremental sales.

Channels that drive the highest number of incremental sales are also generally more expensive. So, if you set ROAS targets without taking incrementality into account, marketers will have to look for cheaper sources of revenue. Usually, they will see themselves in a situation where “Search Brand” is already split out and treated separately because of the obvious lack of incrementality. So, where do marketers find the revenues they need?

The revenues which are least incremental are usually the cheapest, and therefore, marketers often try to increase the volume of display or Facebook retargeting first. Search retargeting is also a great way to hit targets without really having a substantial impact on the business. And the best part about search retargeting is that it’s hidden in the overall search numbers — you have to really zoom into AdWords to see what percentage of the revenue is coming from people who might have bought without spending ad money.

The vicious circle of ROAS targets

Let’s assume you’ve tested the incrementality of your most important marketing channels, and you’re factoring in the findings when measuring the success of your campaigns. Instead of setting traditional ROAS targets, you now refer to incremental ROAS.

In this case, ROAS should no longer be an issue, right?

Sadly, no. In reality, it’s still a big issue which silently destroys performance even at some of the savviest retailers.

How performance marketing targets are set

In most retail companies, marketing budgets are set by finance looking at the historical performance of past advertising campaigns. They know ROAS is a bad indicator for bottom-line profitability, so they go ultra-granular, take the numbers from some internal tracking system — usually based on last-click attribution — and analyze the profitability of every single order, taking into account contribution margins after COGS, shipping, packaging, payment costs and so on.

If bottom-line profitability differs from the internal financial planning, ROAS targets and budgets are adjusted accordingly. Marketing is then incentivized to hit the new targets while not exceeding the budget constraints.

What marketers will do to hit their targets

In order to hit these ROAS targets (including incremental ones), performance marketers will tend to sell more low-margin products to mainly existing customers because these sales deliver the best ROAS.

One simple way to sell to existing customers is by using Customer Match to target known customers. If revenue is the criterion and not margin, bidding systems will automatically allocate the budget where revenue can be found at the cheapest price. Areas of the assortment which have low margins will look better because there is usually less competition.

So, what happens in the next budgeting cycle? Finance will again zoom down to the most granular level, take all the orders and analyze profitability. They will notice that for some strange reason, profitability and new customer rate are down again. As a result, they will tighten the ROAS target.

If you see ROAS targets in your company, it’s very likely that you could easily do much better. If, in addition, you hear that ROAS is not reflecting incrementality, you’re really missing out on a huge opportunity.

Setting better targets and testing incrementality

In order to set performance marketing targets that are beneficial to the bottom line, you first need to find the exact incrementality levels for each of your marketing channels.

Very quickly, incrementality tests are implemented by defining a test and a control group. The test group sees ads, the control group doesn’t. You then analyze the revenues generated by the two groups over time. Incrementality presumes that the test group that sees the ads will generate more revenue than the control group. How much more defines your incrementality.

Once incrementality levels have been established, marketing and finance can work together to align on which metrics they want to use to measure progress. I always recommend customer lifetime value (CLV) or margin.

By using a profit-driven metric, you remove the ability to hit targets by selling low-margin products; and by taking incrementality into account, you make sure that hitting those targets gets you incremental gains.

The only way to enable marketers to really drive what matters is to give them access to order profitability and margins in such a way that they can use them in their bidding tool. This will undoubtedly require some technical integration, but it will deliver an unparalleled return.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

Is holiday paid search more competitive in 2017 than 2016?

The busy 2017 holiday shopping season is now in full swing, and we’ve already witnessed impressive Y/Y sales growth on key shopping days.

As advertisers dig into their own performance, many are taking stock of the competition to get a sense for what other brands are doing. This was a key topic for a #ppcchat Twitter conversation immediately following Cyber Weekend, in which host Kirk Williams posed the following question to chat-goers.

As you can see, most brands felt they saw more competition this year than last year, though 39 percent felt it was about the same. Zero respondents felt that there was less competition this year than last.

Taking a look at Auction Insights reports from Google for a sample of large Merkle retail advertisers, we can get a sense for how many brands were bidding on paid search keywords this year compared to last. As always, the metrics found in these reports and the stories they tell will differ significantly from advertiser to advertiser, but the following gives some quantification of what the paid search competitive landscape looks like this year compared to last.

It also illuminates at least one important 2017 change that advertisers should take into account when comparing these metrics Y/Y.

More shopping competitors than last year

Taking a look at the period from Thanksgiving to Cyber Monday Y/Y, we find that the average number of Google Shopping competitors included in Google Auction Insights increased pretty significantly for each day. The largest increase came on Black Friday, with a 42 percent increase in average numbers of competitors featured.

That’s a lot of additional competitors gobbling up impressions this year compared to last year!

However, one issue that might have increased the number of competitors without any actual change in the number of competitors is Google’s mid-May 2017 update to impression share calculation. With this change, Google increased “the universe of total impressions” it looks at for impression share.

Per Google’s communications, brands might have seen their own impression share decline in May with the increase in total impression volume taken into account in impression share calculations. However, Merkle brands actually saw a modest increase in Shopping impression share beginning in May relative to early 2017 and have continued to see higher impression share.

Taking a look at the number of competitors included in Google Shopping Auction Insights by month since last November, we find that the number increased steadily from November 2016 to April 2017. In May, the number of competitors jumped significantly, and this figure has held roughly steady since late summer.

Thus, it seems like Google’s impression share calculation change might be the culprit of much of the increase we’re seeing in Cyber Weekend competition this year compared to last. It’s possible that the jump in competitors is unrelated to Google’s change and actually does represent an influx of competition in May, but the timing makes me think the two are related.

Looking at competitors by device, phones and tablets saw the biggest jump in the number of competitors Y/Y for most days. Desktop saw its biggest jump on Black Friday and its smallest jump on Cyber Monday.

Number of text ad competitors slightly down

On the text ad side, we actually find that the number of competitors included in Auction Insights declined slightly Y/Y for each day from Thanksgiving to Cyber Monday.

Broken down by device, we find that phones saw the largest declines Y/Y in the number of competitors.

Conclusion

So what does all this mean?

There are definitely more competitors in Shopping Auction Insights this year compared to last. However, we observed a jump in May at a time when Google changed how it measures impression share. Thus, at least some of the increased competition might be the result of reporting changes.

Text ad auction insights show no signs of increased competition over Cyber Weekend this year compared to last on average for the sample studied, and in fact indicate slight declines in the number of brands competing.

Answering the question posed by the title of this post, I think it’s fair to say that Google Shopping is seeing more competition this year than last year, especially since we know at least one massive brand is now involved that wasn’t at this time last year. However, there’s reason to believe that competition might not have heated up quite as much as Auction Insights indicates.

On the text ad side, the decline in the total number of competitors isn’t massive but does seem to be consistent enough to represent a real change from last year to this year. Was the change a real decline in the number of competitors or a shift in something on Google’s end? That’s tough to answer, but the indicators at least point to a conclusion that there was not significantly more competition in text ads this year compared to last over Cyber Weekend.

As mentioned earlier, the competition observed in Auction Insights varies significantly by advertiser, and, as this post shows, also by device and ad format. What is your brand seeing this year?

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

Which PPC metrics matter? Lessons from half a million keywords

Are your AdWords campaigns working… like, really working?

That might be a surprisingly hard question to answer. Anybody with an AdWords account can see if they’re getting clicks, and it’s not too hard to set up conversion tracking — but chances are that the reason you put money into AdWords was that you wanted to get money out.

In other words, you want your ad spend to produce sales.

As obvious as this statement is, actually determining how different factors in your AdWords campaigns affect sales can be fairly difficult. To try to shed more light on the subject, we recently conducted a study on how different variables affect ad performance at Disruptive Advertising (my company). We pulled data from well over half a million keywords and measured return-on-investment against dozens of variables.

In short, we wanted to answer the question: What predicts profitability in an AdWords account? Our findings may surprise you.

1. High CPC = low profitability

With any pay-per-click platform, the more clicks cost, the less profit you’ll make. However, many businesses are quick to argue that if a new sale is worth enough, it’s worth it to bid on keywords with expensive CPCs.

But do things actually work out that way?

In our study, we found that ROI rapidly drops off as your cost-per-click (CPC) increases. For example, take a look at data we pulled from a variety of e-commerce companies:

Now, for these companies, a sale was worth anywhere from tens to thousands of dollars, so you’d think that at least some of their keywords would perform well at a higher CPC. But it didn’t work out that way.

Even for expensive products, higher CPCs were directly linked to low ROI, to the point where paying more than $5 for an e-commerce click is like saying, “No, I don’t want to make money on this product.”

2. Long-tail keywords are a waste of money

Based on the above findings, it seems like long-tail keywords would be the way to go. After all, the longer the keyword, the less competition there is and the cheaper the click will be.

However, that only works up to a point.

When we looked at how keyword length affected ROI, we found that the most profitable keywords typically had 15 to 30 characters.

If you think about it, these findings make sense. Below 15 characters, you face one of two problems:

    The keyword is too non-specific and produces low-quality clicks, orThe keyword has good volume and intent but is way too competitive.

Above 30 characters (and especially above 40 characters), the searches are usually incredibly specific and have low conversion intent. For example, we once saw an AdWords account that had received 127 clicks from the search term “how do I remove the terrible smell from carpet that has been flooded using household ingredients.”

Despite all these clicks, this search term had never produced a single conversion. Why? Well, people who bother to type in a 96-character search term like this are usually looking for a very specific answer — the kind that you get on a forum or answer board, not a landing page.

3. More clicks don’t mean more conversions

If you have a conversion rate (CR) of 5 percent and a click-through rate (CTR) of 5 percent  for a given ad, it’s easy to assume that doubling your CTR will double your conversions. While that may be true in some situations, as a general rule, increasing your CTR actually tends to decrease your conversion rate.

Yes, you read that right.

In our study, higher CTRs were typically associated with lower conversion rates. Let’s take another look at that e-commerce data we were talking about earlier.

(Note: Since this is e-commerce, a single click sometimes leads to multiple sales, which is why a good chunk of our conversion rates fall above the 100 percent mark.)

As you can see in the graph above, as CTR improves, the conversion rate plummets. But why? Since people only click on ads that they think match their intent, wouldn’t a higher CTR lead to a higher conversion rate?

Unfortunately, that only happens if you are targeting the right audience with the right message. In many cases, CTR improves because you are targeting the wrong audience with the wrong message (or at least an unclear message). As a result, they think they’ve found what they’re looking for, only to end up on your landing page and discover that your business isn’t what they really want.

4. There is no silver bullet

Sadly, this is where the clear data ends. Although AdWords experts love to say, “Pull this lever and you’ll make more money,” it doesn’t work out that way in practice.

For example, let’s take a look at how well click conversion rate (percentage of clicks that convert at least once) predicts ROI:

At first glance, this graph looks great! I mean, look at that trend line. Clearly, the higher your conversion rate, the more profitable your campaigns will be, right?

While this graph looks compelling, there’s a problem. If you take a close look at the graph, it’s pretty clear that the dots don’t really follow the line. In other words, the trend line doesn’t do a very good job of predicting real-life results.

In statistics, we describe how well a trend line fits the data using R2 (R squared). In the case of the graph above, the R2 value is 0.31, which essentially means that the trend line is only accurate about 31 percent of the time.

In our study, we found that the best predictors of ROI were the amount of time spent on a page and the number of pages visited. That’s kind of a no-brainer — if you’re converting, you’re going to spend more time on the site and visit more pages. But it’s hard to use that data to improve campaign performance. After all, forcing someone to visit more pages and spend more time on your site isn’t likely to get them to convert.

But what about all the other metrics we love to watch? How does modifying those metrics affect ROI?

As you can see above, the very best predictors of ROI are CTR and CPC. But even those factors only have R2 values of 0.27 and 0.19, respectively. A 27 percent and 19 percent success rate aren’t exactly the kind of wins you want to wager money on.

Now, that being said, these numbers are based on our whole data set. When you group companies with a $0.25 CPC and a $10 product with companies with a $25 CPC and a $1,000 product, your data are not going to be very consistent.

So, let’s try to simplify things. Instead of looking at our whole data set, let’s look at the R2 values for e-commerce keywords with very similar CPCs and see if that provides any additional clarity:

In this chart, I’ve assigned bronze, silver and gold medals to the top predictive factors in each CPC range. As you can see, hashing out the data in this way does improve the predictive value of each of these factors, but our best performer is still only accurate about 50% of the time.

So, regardless of what you may read out there, there is no “silver bullet” for AdWords performance. Improving your CTR, ad position or conversion rate might improve your ROI, but it’s a shot in the dark.

Conclusion

Really, when you get right down to it, every business and market audience is unique, which means that the only true “silver bullet” may be blood, sweat and tears. That being said, these data may be a bit of a relief to you.

After all, if improving these metrics doesn’t reliably improve ROI, that means you can spend less time worrying about your CTR and more time identifying new, creative ways to reach and influence your target audience. If you’re focused on creating profitable ads and campaigns, rather than improving surface metrics like bounce rate, you’ll probably end up with better results.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

The importance of targeting branded searches

Search experts understand the importance of targeting non-branded search terms: Optimizing for high-volume, non-branded terms can drive a significant amount of traffic to your brand’s site.

While targeting non-branded search terms plays an essential role in your overall search strategy, many brands still underestimate and neglect the power of branded search terms. By relying on the strength of a brand and integrating branded search tactics with current non-branded search strategies, your business can discover more qualified leads — and, as a result, increase conversions.

The role of branded search in consumer behavior

For many established companies, their branded terms make up a majority of their keyword profile. If people are searching for your brand or products by name, they’re likely deeper within the sales funnel. In fact, Google has found that branded keywords have over two times higher conversion rates when compared to non-branded terms. So why would brands shy away from increasing or stepping up their branded search efforts?

Let’s flip the script and put you in the customer’s shoes. Say you’re searching for a fitness tracker your brother would love this holiday season. When you begin your gift hunt, are you more likely to search for “best fitness tracker for men,” or for “best Fitbit for men”?

Data from Google AdWords Keyword Planner

Due to the Fitbit’s brand awareness efforts, the product is iconic enough that consumers search for it more often than non-branded terms. Search engines like Google, Bing and Amazon recognize the strength of the brand — SERP layouts and competitive pricing reflect this.

Brands working to improve their conversions need to work the entire marketing funnel. For brands or products well-known enough for branded search terms to be relevant to audiences, it’s important to know how audiences discover your products so you can target these branded search terms. Otherwise, you’re leaving money on the table for competitors and review sites to take for themselves.

Integrating branded search tactics into marketing strategy

With a strong brand, and thus stronger branded search terms, bread-and-butter search tactics will have some incredible advantages. These advantages span both paid search and organic search tactics, affecting every aspect of search from the page rankings, search boxes, knowledge panel, and even map results. With branded search, search engines will recognize your main site, if optimized for best practices, as the most relevant site for searching by potential customers.

Organic search

Your home page and (if applicable) product category pages should rank the best for high-traffic branded search terms. Your title tags and meta descriptions should clearly display these branded search terms and relevant context that encourages searchers to make the decision to click. Once they do, the site should match the promise the SERP listing made with this copy.

Your goal should always be to dominate the first page and to obtain the highest positions with optimal branded search efforts. Brands should not only focus on their branded terms at the user’s research and consideration phases of the funnel, but also the post-purchase phase.

In the research phase, searchers will find strong, relevant brands first and foremost. Consider that they will also be looking for reviews, pricing and where to buy the product. This information should be available to users prior to their converting.

But the job isn’t done after converting. Post-purchase, many users will search for more information about the product using branded terms — installation instructions, how-to guides, proper cleaning and maintenance techniques, general product help and more — and these searches should lead to your website.

All of the brand-related terms throughout the sales funnel have heightened search term relevance to affect consideration, conversion and continued use.

Paid search

If you plan to own as much real estate on the SERPs as possible, paid search is an essential tactic to earn qualified leads. Even if you have obtained the top ranking in organic search results, research suggests that having an ad can produce incremental clicks. With little competition, it’s pretty easy (and cheap) to own these paid search spaces.

With branded search ads, you should be making use of ad extensions. These will provide more information to searchers, which can make your ad stand out and entice users to click. Certain extensions — such as sitelink, location or price extensions — can also increase your listing’s SERP real estate, particularly on mobile.

Keep in mind that Google factors ad extensions into its Ad Rank calculation, so proper use of extensions can give you an edge over competitors who may be running conquest campaigns on your brand name.

Other branded search considerations

Beyond the basics of SERPs with organic and paid search listings, you should be taking advantage of additional branded search real estate options that should be taken advantage of, including:

Organic sitelinks, the links that are displayed under the top organic search result. They’re important since they occupy a lot of SERP real estate and can function as an outline of your site, helping users to navigate to your other top pages. Google determines whether it will provide sitelinks or not, so you don’t have direct control over this — but you can help Google out by submitting an XML sitemap and having your site set up with a logical hierarchy.

Apple shows six organic sitelinks for a branded search. Note the site search box, too.

You want to make sure map results are showing up for you if your brand or business has physical locations. To do this, you need to ensure that you’ve set up Google My Business listings with the correct NAP (name, address and phone) information.If your site has an internal search function, you then have a solid chance of a search box showing up on Google. If it doesn’t display within the SERPs, you can utilize structured data markup per Google’s guidelines.The Knowledge Graph helps users discover business information quickly and easily. Google will pull this information automatically from trustworthy sites like Wikipedia or WebMD. With the right mix of search tactics, you can obtain a Knowledge Graph result for your brand. Make sure that you have all social channels, a solid description, reviews and accurate information correctly displaying in the eye-catching Knowledge Graph.

Final thoughts

Branded searches are imperative and shouldn’t be overlooked. Many assume that search queries involving your brand will naturally lead to your website, but that’s simply not the case. Without optimizing your paid and organic search efforts to capture branded searches throughout the entire purchase cycle, you’ll be missing out on tons of potential new traffic and conversions. Owning as much real estate as possible for your brand is crucial, especially during high-traffic seasonality.

Oftentimes, branded search terms can be the last channel touch point for consumers who are about ready to convert on one of your products or services. By incorporating branded search into your overall digital marketing strategy, you can quickly accelerate your brand, helping it stand out on the SERPs and provide a better experience to audiences.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

Omnichannel shoppers collide with Black Friday and Cyber Monday, setting new records

Black Friday and Cyber Monday continue to gain cultural significance across the US and the globe as shoppers and retailers deepen their relationships through enhanced technology, stronger/more personalized deals and a singular online-offline approach. As for 2017, all major metrics trended up, including click volume, mobile purchases, foot traffic and overall sales. Cyber Monday 2017 marked the biggest shopping day in US history, with over $6.59B in sales, including a record-breaking $2B in mobile sales.

Bing (my employer) also saw strong positive trends, with a YOY jump in clicks across Black Friday, Cyber Monday and the entire month of November. In the US, clicks were up 9 percent (cross-device) between Black Friday and Cyber Monday when compared with the same time period in 2016, and we also saw clicks up 12 percent YOY for the month of November. The rise in clicks is likely due to large retailers who extend Black Friday deals earlier and later — a trend US consumers have come to expect as retailers like Walmart and Toyota offered week-long Black Friday deals.

This increase in clicks YOY wasn’t just a trend we saw in the US, but also around the world, as Black Friday and Cyber Monday become a global phenomenon. Bing’s international clicks across all devices were up over 17 percent for Black Friday and 20 percent for Cyber Monday.

The holiday numbers also support a strong omnichannel approach throughout the 2017 season. According to Matt Shay, CEO of the National Retail Federation (NRF), 51 million Americans shopped exclusively in stores throughout the holiday weekend, 58 million Americans shopped exclusively online, and a majority 65 million shopped both, representing the new sweet spot for leading retailers.

The online, mobile and in-store experience needs to work in harmony if retailers are going to continue in the new economy. The NRF reported that over 174 million Americans showed up in stores over the holiday weekend as retailers wooed consumers with free coffee bars, foot massages and cosmetic samples. As the numbers show, these same shoppers went home to buy online, many of them making purchases on their phones. The Home Depot even reported seeing more mobile traffic than desktop.

Black Friday deals also popped up in some new places, such as the Amazon Alexa, where users could find early deals starting November 22 through voice shopping. In classic omnichannel form, Amazon leveraged their Whole Foods brick-and-mortars to promote their Alexa devices. Every retailer should be following suit, combining their online and offline forces for maximum impact.

Bing’s Black Friday to Cyber Monday search trends

I love digging into the query reports post-Black Friday and Cyber Monday to highlight a few trends and see what has changed in consumer behavior as users search for deals this holiday season. Here are the insights I uncovered based on search trend data from the 2017 Black Friday to Cyber Monday shopping period:

Don’t forget to add year-modified keywords

We continued to see the trend where consumers are adding the calendar year to their search queries when looking for specific deals and offers. The top Black Friday and Cyber Monday intent-related keywords can be summarized in the following query combinations:

‘Tis the season for tech and entertainment

As in previous years, we saw a surge in tech-related queries as consumers searched for the latest phones and gaming consoles. It’s no surprise to me that the most-searched-for tech items are the two that are almost impossible to find with a discount: the iPhone X and Xbox One X.

We’re also seeing search trends that point to this year’s hottest toys. Last year, Hatchimals were the toy du jour; this year, Fingerlings have taken over. There was also a surge in searches for Yu-Gi-Oh! Dueling Nexus.

It’s also the time of the year to be entertained, so it wasn’t a surprise to see the movie “Bad Moms Christmas” as one of the top new queries over the holiday weekend.

It’s not too late

There’s still time to make the most of the 2017 holiday season. Here are five quick ways you should be using search to leverage your omnichannel strategy:

    Get ready for Green Monday. The 2016 comScore data rated the second Monday in December, or Green Monday, as one of the busiest shopping days of the year. Be sure your campaign budgets are high enough to accommodate a likely spike in traffic on Monday, December 11.Watch your budgets: Make sure you account for high-traffic shopping days. 2016 comScore data showed a string of 27 consecutive billion-dollar shopping days between Thanksgiving and Christmas, up from nine consecutive billion-dollar days in 2015. If this trend continues, it is worth keeping an eye on campaign budgets between Thanksgiving and Christmas, paying special attention to your top traffic days for the 2016 holiday season to make sure you don’t run out of budget before the end of the month.Know your shipping cutoff dates. Make it easy for your customers to understand the deadlines for ground shipping, two-day shipping, next-day shipping, or even same-day shipping, so their gifts can make it on time. I pulled together the dates from USPS, UPS and FedEx for you in the graphic below:
    Use ad extensions to call out shipping cutoffs and promotions. No one likes buying holiday presents only to miss the cutoff by a single day. Be sure to clearly communicate your shipping requirements with customers, including placing it in ad copy and site extensions. It’s not too late to use countdown ads customizers in your ad copy to call out shipping cutoffs or to call attention to those last-minute holiday promotions.If available, advertise free store pickup. Most of today’s leading retailers are offering free store pickup as a solution for busy holiday shoppers. If applicable, advertise free store pickup in ad copy and site extensions, especially after shipping cutoff dates pass.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.